If an external cost exists, then who bears the external cost in an unregulated competitive market transaction?
A) nobody
B) the federal government
C) someone other than the producers
D) the buyers of the product
Ques. 2The median household income is
A) the income that separates households into two equal groups.
B) the most common household income.
C) the mean household income.
D) the average household income.
Ques. 3In the table above, the marginal product of the third unit of labor is ________ units of output.
A) 3
B) 4
C) 12
D) 16
Ques. 4Libertyville has two optometrists, Dr. Smith and Dr. Jones. Each optometrist can choose to advertise his service or not. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above.
Which of the following statements CORRECTLY categorizes the Nash equilibrium for the game? A) The game has a Nash equilibrium in which both optometrists advertise.
B) The game has a Nash equilibrium in which both optometrists do not advertise.
C) The game has a Nash equilibrium in which Dr. Smith advertises and Dr. Jones does not advertise.
D) The game has a Nash equilibrium in which Dr. Smith does not advertise and Dr. Jones does advertise.
Ques. 5Firms in monopolistic competition make products that are
A) perfect complements.
B) close but not perfect complements.
C) perfect substitutes.
D) close but not perfect substitutes.
Ques. 6Gil can consume either pens or milkshakes. Both pens and milkshakes sell for 1. Gil finds that when his income is spent, his marginal utility of pens will be 10 while his marginal utility of milkshakes will be 8.
Gil could increase his utility without violating his budget by consuming A) more pens and fewer milkshakes.
B) more pens and more milkshakes.
C) fewer pens and fewer milkshakes.
D) fewer pens and more milkshakes.
Ques. 7The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social benefit from the 300th dozen doughnuts each day?
A) 10.00 per dozen
B) 8.00 per dozen
C) 6.00 per dozen
D) 4.00 per dozen
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